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The Sunset Limited

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Posted by MichaelSol on Sunday, January 13, 2008 12:21 PM
 Samantha wrote:

The premise underlying the use of focus groups and independent facilitators is that no one has made up his or her mind.  Moreover, it is intended to find out what potential users want and what they are willing to pay for without pre-determined biases.

The problem is, it is a "top-down" approach in that it appears to be an effort to create a "national policy" which invariably is a one size fits all, a Central Planning approach, even as it seeks a stamp of approval by including so-called user groups in its formulation.

Advocates of rail passenger service are, to me anyway, split into two distinct groups. The first -- old men for whom rail transportation represents a nostalgic memory of what once was a very good, comprehensive system whose cost impact on railroads was much less than they complained about and, with government support in the form of RPO (support for which the government received a service), may have even made a nickel here and there.

The second, "policy" planners who never saw a government mandate that they didn't like and for whom centralized rail passenger policy fills an ideological need for them, even as it may or may not fill a genuine national transportation need.

For whatever it's worth, effective rail passenger transportation service in the United States will have to rebuild itself, route by route, network by network, almost as it did at the start. Each project will have to be self-justifying either economically or politically at the local level. Inevitable price rises in fuel costs will drive these efforts just as naturally as can be. The key to this approach -- a "bottom-up" approach -- is that these projects will generate genuine management expertise. Each successful project will create an experience pool that each new project can draw from. And that is really the genius, but also the "market approach" that I happen to think promises success.

Piece by piece, a national rail passenger transportation system will slowly come into being as the result of rational needs. Amtrak is an obvious backbone and Congress needs to look at it from that standpoint. Much like the Interstate Highway System -- fund the backbone appropriately, and all sorts of commerce begins to develop around it.

The problem, and it is a big one in my view, is that the rising price of fuel will also generate increasing cost differentials for freight transportation in favor of railroads. As the rail industry gains increasing pricing power through the relative efficiency gains in a key cost -- diesel fuel -- vis-a-vis other transportation forms, rail corridors will simply be as full up as the railroads want them to be. The industry thinks it has congestion problems now -- "it ain't seen nuttin yet." This is probably the ultimate reason behind Warren Buffet's interest in railroads: the ultimate leverage of transportation cost -- fuel -- will from here on out leverage entirely in favor of railroads, and that leverage will continue to increase. At about $6.20 a gallon on diesel fuel, Electrification will become entirely cost-effective, but this will even further increase the rail industry's leverage on cost of operation compared to competing forms.

But, at those fuel prices, rail passenger service is also going to look mighty attractive as a cost-effective solution for moving people.

If there is a national rail passenger transportation policy debate, it may be less useful to impose planning solutions on how to do it, but rather, when freight railroads are simply full up, to attempt to figure out where are the passenger trains going operate? I suppose the railroads would be glad to sell the service at the appropriate price for highly expedited service, but the problem is that the cost of operation on a rail system at maximum capacity is 150% higher per unit output than the cost at optimum capacity.

And "optimum" -- measured by profitability -- is surprisingly low compared to maximum capacity. If a railroad really wanted to operate at maximum profitability, it would run about 9 trains a day on a single track mainline with 6 mile siding spacing, even as track capacity might be 33 trains per day. Filling up that extra capacity reduces profitability by increasing variable costs of operation, and railroads don't want to do that, so naturally the price charged for the service goes up, as utilization is increased. Unfortunately, it's passenger rail service that operates -- or will conceivably be operating -- in the high cost margin zone.

Add to that the system costs of a high priority train -- of any type -- and the cost of operation per unit output can exceed 200% of the cost of operating a non-priority service under conditions of optimum (minimum) cost of operation per unit output. What that means is that the cost of rail passenger service will rise correspondingly faster than anything else that uses the railroad, and will be considerably more expensive, relatively, than it is today.

And that's going to be a bit of a damper on things. A "National Policy" approach can put a terrific tailwind on these projects without necessarily having a rudder to adjust for rapidly changing circumstances. And diesel fuel costs are it.

Local projects can probably accomodate these changes more successfully and, as I say, create step by step the necessary management expertise to slowly put together a useful system.

 

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Posted by oltmannd on Sunday, January 13, 2008 12:04 PM
 Mr. Toy wrote:

During WWII the nation's motto was "We can do it!"

Now, according to Samantha, everyone has their minds made up, nobody can agree on anything, so we can't do it.

I've tried to present a way we might actually do it, but the cynics say "We can't do it."

And its not just about transportation, it's also about health care, immigration, middle east peace, energy, the environment, and a host of other issues. Saying "We can't" tends to be a self fulfilling prophecy.

I'm not giving up that easily.

It's not that "we can't do it".  It's one step upstream of that.  It's WHAT should we do and why.  And then, once we decide, it's HOW should we do it.

There is no doubt that we can do it.  We just shouldn't do wasteful things in a wasteful manner.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by Anonymous on Sunday, January 13, 2008 9:06 AM

The premise underlying the use of focus groups and independent facilitators is that no one has made up his or her mind.  Moreover, it is intended to find out what potential users want and what they are willing to pay for without pre-determined biases.

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Posted by Dakguy201 on Sunday, January 13, 2008 8:01 AM

Mr.Toy, you process is fine, but I question if it would produce anything but more paper.  Several of the states have started regional services in the past few years; and some of those appear to be successful.  Missouri, Illinois, Michigan, North Carolina, California are all examples of recent start ups.

A state may choose Amtrak as the source of equipment and the service operator; and indeed may be forced to do so as a condition of using a private right of way.  However, New Mexico is building a service that largely ignores Amtrak. 

My point here his that the "a train in every town" approach advocated by NARP and what I believe your panel of experts would recommend has accomplished little in more than 30 years, while in the last few years the states have jumped in and begun to provide real services to real passengers.  Top down planning accomplished nothing of note, but the bottom up approach just might be working.   

Somehow I'm reminded of the Chinese saying to the effect that you don't really care if it is a black cat or a white cat if it catches mice. 

 

 

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Posted by Anonymous on Saturday, January 12, 2008 8:54 PM

During WWII the nation's motto was "We can do it!"

Now, according to Samantha, everyone has their minds made up, nobody can agree on anything, so we can't do it.

I've tried to present a way we might actually do it, but the cynics say "We can't do it."

And its not just about transportation, it's also about health care, immigration, middle east peace, energy, the environment, and a host of other issues. Saying "We can't" tends to be a self fulfilling prophecy.

I'm not giving up that easily.

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Posted by Anonymous on Saturday, January 12, 2008 9:09 AM

When the electric utility industry in Texas was deregulated, my company ran focus groups for existing and potential customers.  The participants represented a cross section of the adult public.  The objective was to determine what they wanted in electric services and what they would be willing to pay for them.   

The groups were facilitated by an independent facilitator who did not have a dog in the hunt, which is Texan for saying that he did not have a vested interest in the outcome. 

NARP is not a bias free organization.  It is a rail advocacy group.  Its mission is to promote passenger rail irrespective of whether it is the best solution.  As the president of TXARP put it, our mission is trains and more trains everywhere.

Ideally the U.S. should develop a national transportation framework.  The objective should be to optimize the modes of transport, i.e. use what works best for the users in a given location.  Frameworks are less specific than policies and, therefore, have a better chance of working.  If the U.S. had a national transportation framework that required each mode of transport to stand on its own, without any subsidies, passenger rail probably would be confined to high density corridors. 

Not to worry!  This country is too big, too diverse, and too contentious to adopt a rational national transportation framework.  There are too many people who have a vested interest in the status quo or their favorite mode of transport.   

 

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Posted by Anonymous on Friday, January 11, 2008 7:03 PM
So put a few seasoned customers into the mix. I sorta figured NARP had that angle covered, and would be redundant, but a few non-NARP customers would fit in just fine. The point here is to do something practical, even if it isn't perfect in everyone's eyes, instead of going around in argumentative circles.
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Posted by cordon on Friday, January 11, 2008 2:45 AM

Smile [:)]

Conducting a market study is not the same thing as customer participation. In fact, market studies often suffer from the biases of the studiers and the "simplifying assumptions" that form the foundation of the study. The customers, of course, take no part in making up the assumptions, and they have their own biases. Worse yet, the current vogue in management is to hire young graduates, some with master's degrees and PHDs, who claim to be experts in statistical analysis and statistical test design.  That they may be, but my experience in my last few years working for the Navy Department in Washington, DC, is that these study experts more often than not know nothing about the business at hand.  So, bias and unfamiliarity with the operation equals a study that very poorly represents the desires and needs of the market.

Now, upper-level managers are not all conceited and condescending, but they all seem to have an overpowering aversion to consulting or working directly with users and customers.   What are they afraid of?  My guess is that they know that they have to have more allegiance to other stakeholders in positions to influence their careers.

Smile [:)]  Smile [:)]

 

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Posted by Anonymous on Friday, January 11, 2008 1:35 AM
 Samantha wrote:

Missing from the team to hammer out a blueprint for a national rail policy is a cross section of potential customers.  Including them could involve a significant risk.  They might decided that they want something very different from what the so called professionals want.  And it could turn out to be a shocker.  It could also produce a better outcome. 

I would think that such group would make the effort to conduct a market study before they go out and start selling a product. Actually, professional planners take great care to establish public demand for rail service before they start building things. In fact, they have to in order to get funding. What I listed above, presented somewhat tongue in cheek, is merely Part I of a larger proposal I have suggested on other forums for years.

For the rest of the program, the group would be instructed to do the following:

  1. Conduct a market study to determine future travel patterns - i.e where people are and where they want to go, taking into account  population growth, the availability of other modes and their projected levels of congestion, and convenient scheduling. They would also compare costs of providing comparable additional capacity through different modes to determine if rail is cost effective. Also the study should determine what sorts of amenities people would like and what they are willing to pay for. 
  2. From this data design a route network with convenient schedules and connections.
  3. Determine what sort of infrastructure upgrades and equipment will best serve each route. I suspect it would require a combinarion of high speed, conventional trains, and something in between (100-125mph) depending on the route and markets.
  4. Determine the capital costs of these upgrades.
  5. Propose appropriate sources of funding for these upgrades, and for any operational funding requirements, with final determination coming through the legislative process.
  6. Determine what sort of management structure would best serve the network. It may be something similar to the current Amtrak model, some sort of public-private partnership, or something else entirely. I think it is important to keep an open mind here.
  7. Since the network is unlikely to be built all at once, determine which routes should receive priority for initial development.
  8. Work with Congress to enact legislation to bring the plan to fruition.

I have run this past two professional transportation planners, one who headed a state rail program for several years, and another who has worked on rail projects in this and other countries, and both have said this is pretty much how it should be done. The most important thing is getting all interested parties involved in the process so that everyone's needs are taken into account. The "reform" proposals put forth in the last several years all tried to impose an ideology from the outside, without bothering to even consult with the players. And most of them only covered step 6. It is no surprise that each of these reform plans was DOA on Capitol Hill. 

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Posted by Anonymous on Thursday, January 10, 2008 11:11 PM

Prior to the deregulation of the electric utility business in Texas, the utility executives 'knew' what was best for their customers.  But after deregulation they got a shocker.  They found out that in a competitive market it is the customer who determines what he or she wants.  They vote with their dollars. 

Missing from the team to hammer out a blueprint for a national rail policy is a cross section of potential customers.  Including them could involve a significant risk.  They might decided that they want something very different from what the so called professionals want.  And it could turn out to be a shocker.  It could also produce a better outcome.  

 

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Posted by oltmannd on Wednesday, January 9, 2008 9:02 PM
 Mr. Toy wrote:

I think the diversity of viewpoints and opinions expressed thus far illustrate the complexity of the problem. Everything from food service to scheduling to track ownership to union rules affects the financial performance and marketability of a long distance train. Throw in a handful of political ideologies, personal needs and preferences of countless individual travelers, and a few armchair analysts, and you have a confusing cacaphony of ideas about what is "best." If there were easy answers they would have been taken care of long ago.

If I was running things, I would gather together the following people...

  • Representatives from Amtrak
  • Representatives from the freight railroads
  • Professional transportation planners
  • Representatives from USDOT
  • Representatives from state transportation departments
  • Representatives from NARP, National Corridors and URPA
  • Representatives from the railroad unions.

And lock them up until one of two things happens:

  1. They produce a blueprint for a national passenger rail policy
  2. Their bickering causes the building to explode.  

3. They agree, then reneg saying they are being misrepresented...

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by Anonymous on Wednesday, January 9, 2008 6:37 PM

I think the diversity of viewpoints and opinions expressed thus far illustrate the complexity of the problem. Everything from food service to scheduling to track ownership to union rules affects the financial performance and marketability of a long distance train. Throw in a handful of political ideologies, personal needs and preferences of countless individual travelers, and a few armchair analysts, and you have a confusing cacaphony of ideas about what is "best." If there were easy answers they would have been taken care of long ago.

If I was running things, I would gather together the following people...

  • Representatives from Amtrak
  • Representatives from the freight railroads
  • Professional transportation planners
  • Representatives from USDOT
  • Representatives from state transportation departments
  • Representatives from NARP, National Corridors and URPA
  • Representatives from the railroad unions.

And lock them up until one of two things happens:

  1. They produce a blueprint for a national passenger rail policy
  2. Their bickering causes the building to explode.  
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Posted by CSSHEGEWISCH on Wednesday, January 9, 2008 12:10 PM
Most hearts are in the long-distance passenger trains because that's where the romance is.  Medium to short haul is where the reality is.
The daily commute is part of everyday life but I get two rides a day out of it. Paul
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Posted by Paul Milenkovic on Tuesday, January 8, 2008 2:57 PM

A good example would be that Amtrak didn't try very hard to reform their dining car service until the GAO questioned why they had them at all.

How Amtrak reacted is one matter, but many in the advocacy community screamed bloody murder that GAO was even asking those questions.  There is a sentiment that Amtrak gets a small dollar amount of subsidy relative to other modes, therefore Amtrak is underfunded, and until Amtrak gets the amount of money the advocacy community thinks is appropriate, questions about rates of subsidy or about dining cars or sleeping cars are all "red herrings" advanced by people who want to do away with trains.

I am thinking that the heart and soul of the advocacy community are the LD trains with the sleepers, diner, lounge.  I mean hourly service, although at 40 MPH average speed, between LA and San Diego is quite the accomplishment, but who can get excited about a trip to San Diego on a Pacific Surfliner car?  The high level of service and varied tiers between Acela express and Acela Regional is quite an accomplishement, but you ride from NY to Philly for a bunch of money in what is essentially a jet airliner on steel wheels -- many people are served by this, but what is the big deal to brag that you have been on the Acela train?

But to take a sleeping car West on the Empire Builder -- that is a journey, and adventure, a travelling experience to talk about.  In contrast, what is the Hiawatha except a somewhat faster bus ride?

So the advocacy community talks corridors, high-speed trains, congestion relief, high gas prices, but our hearts are about the long railroad journeys.  When these long railroad journeys are threatened, we feel threatened.

If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?

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Posted by oltmannd on Tuesday, January 8, 2008 11:39 AM
 Samantha wrote:

Free societies, including free markets, are not perfect.  They have generated their fair share of abuse.  But they are better than state controlled societies and markets.  Witness the transitions in Russia, India, and China, which have embraced freer market economies even as they shun all or many of the features of democracy. 

I spent most of my working life with a large electric utility.  When I signed-on it was a regulated monopoly, which meant it had no industry competition.  It looked like what I imagine Amtrak's inner workings to be.  The waste was awful.  But by the time I retired the electric utility market had become competitive.  My employer became leaner, meaner, and more effective.  Most of the stakeholders benefited from competition, although some of the employees lost their make work jobs and some never made the transition to a competitive environment.

Free markets, albeit imperfect, will force out the inefficient and incompetent.  My support of them is not ideological.  It is driven by a sharp pencil as well as a recognition that if the user doesn't tote the note, someone else will have to pick it up.

Which is EXACTLY why I think the application of free market forces, or even psuedo-free market forces externally and/or internally to Amtrak could make things a whole lot better.

I just read a "Daily Drucker" that profitablity is a great measure to make sure you're not hanging onto "yesterday" - a sign of organizational inertia of which gov't is most prone.  When the only restraint is economics, i.e. "can I get enough money to keep doing what I've been doing", yesterday can hang around forever and you'll never move on to the next thing.

A good example would be that Amtrak didn't try very hard to reform their dining car service until the GAO questioned why they had them at all.

Should the LD trains be part of the overall network of intercity trains?  I think the political reality makes the answer "yes." They are definitely from "yesterday", but that doesn't mean they have to BE yesterday.  They are combination restaurants, hotels, sightseeing tours and basic transportation rolled into one.  So, FOR EXAMPLE (nitpickers and naysayers, pick away!) why not contract out to the best of the best for each function.  Have Hilton take over the sleepers.  Have Longhorn/Red Lobster/Olive Garden/Capitol Grill run the food service.  Hire a world class airline to train and manage everybody else.  Get more NPS rangers and docents on the trains where appropriate.  Put these services out for bid.  Amtrak pays the contractor a flat fee and the contractor is then motivated by profit to run the business.  Give Amtrak the incentive to mind the store by paying their employees a bonus based on passenger-miles per subsidy dollar.

BTW, your description of change in the utility industry mirrors what happened in frt RRing over roughly the same time period - for the same reasons!

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by Anonymous on Tuesday, January 8, 2008 10:28 AM

Free societies, including free markets, are not perfect.  They have generated their fair share of abuse.  But they are better than state controlled societies and markets.  Witness the transitions in Russia, India, and China, which have embraced freer market economies even as they shun all or many of the features of democracy. 

I spent most of my working life with a large electric utility.  When I signed-on it was a regulated monopoly, which meant it had no industry competition.  It looked like what I imagine Amtrak's inner workings to be.  The waste was awful.  But by the time I retired the electric utility market had become competitive.  My employer became leaner, meaner, and more effective.  Most of the stakeholders benefited from competition, although some of the employees lost their make work jobs and some never made the transition to a competitive environment.

Free markets, albeit imperfect, will force out the inefficient and incompetent.  My support of them is not ideological.  It is driven by a sharp pencil as well as a recognition that if the user doesn't tote the note, someone else will have to pick it up.

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Posted by MichaelSol on Monday, January 7, 2008 12:46 PM
 Mr. Toy wrote:

There are many other reasons why people choose LD trains. Some are Amish or Mennonites who don't fly.

The Upper Great Plains, both the Canadian and American sides of the border, was apparently a favored destination for Hutterite and Mennonite colonies, and even small sprinklings of Amish, and they are familiar sights on the Empire Builder. They are almost invariably in the "Lounge" car taking advantage of the dome feature to observe the country as it passes by. The ladies, in their dresses and bonnets, sit off by themselves usually talking quietly together and knitting. The men will sit in their black outfits and hats and engage in conversation about the farms they are seeing pass buy.  They are speaking an antique form of German anytime I have overheard them, but its just close enough to Dutch that I can usually catch the gist of what they are talking about. They have a great interest in what they are seeing, and the trip for them is obviously a grand tour of farming practices and how the rest of the world does things.

Interesting how obscure and archaic religious sects from Europe, continuing to speak German, become on the Empire Builder a genuine part of "Americana".

 

 

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Posted by oltmannd on Monday, January 7, 2008 11:35 AM
 Samantha wrote:

Well, this topic has certainly generated more interest that I could have imagined. 

As is the case with most issues, there are many legitimate views regarding whether the government should be in the railroad business and, if so, to what extent.

In my view government should not be in any commercial enterprise, especially one that is not used by most of the people in the body politic.  Competitive markets are the best place to allocate scarce resources, whether it is tobacco or cars or passengers trains.  Free markets, however, have winners and losers.  Not every activity makes the cut.  But they are the best way to determine what people are willing to pay for in an arms length transaction.

No one knows what the government would have spent the money on if it had opted not to save the intercity passenger train.  All we know at this point is that Amtrak has received substantial taxpayer funds since 1971 and could not have continued without them. 

I always get a bit queasy about the term "free markets" because I don't think that any really exist.  "Free market forces" exist, but every market is disorted in some manner somehow by some human entity.  And, any time you try to draw a box around one entity in a market and try to exert free market forces on it, or regulate it, or subsidize it, without regard to the market "outside the box" you can suboptimize the whole market.

So, do we try for perfect and give up if we can't get it?  Or, do we just try for "Better"?  Or, should we be satisfied with "Good enough"? Or does "Might make right"?

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by oltmannd on Monday, January 7, 2008 11:12 AM
 Mr. Toy wrote:
 Samantha wrote:

Higher fuel costs might create an environment where it would be possible for train operators to recover their costs and earn a return for their shareholders.    

But why do you assume that principle would only apply to short distance trains and not long distance trains?  If fuel costs were raised to cover the true costs of its production as you suggest, jet fuel would also be much higher, and air fares would not longer be as cheap as they are today. That could make long distance train travel much more attractive. 

Because trains lost the overnight business traveller way back when  to bumpy, slow, DC3s - when frequent, new, luxourious and (fairly) fast trains pretty much ran everywhere.  I kinda doubt that a small difference in ticket price due to fuel cost differential would be enough to get the LD trains over the hump.  They have a mighty high mountain to climb.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by Anonymous on Sunday, January 6, 2008 1:41 AM
 Samantha wrote:

Higher fuel costs might create an environment where it would be possible for train operators to recover their costs and earn a return for their shareholders.    

But why do you assume that principle would only apply to short distance trains and not long distance trains?  If fuel costs were raised to cover the true costs of its production as you suggest, jet fuel would also be much higher, and air fares would not longer be as cheap as they are today. That could make long distance train travel much more attractive. 

If the government created a level playing field for all common carriers, as well as private transport, market driven passenger trains might be possible in some areas.

I'm inclined to agree with you there. The key here is a level playing field. Existing subsidies for Amtrak are an attempt to do just that given the diffferences in how railroads are run compared to everything else. 

Now, you have stated that you don't think the government should be involved in any  commercial enterprise. I understand that view, even if I don't necessarily agree with it. As an ideal, it has many merits, but I think it is too narrow a view to apply it indiscriminately in the real world.

IF all things were equal, if railroads had a publicly owned infrastructure and anyone with a train could use any tracks, and if those tracks were adequately maintained by the government to allow for the smooth flow of both passenger and freight traffic, then I would agree with you. Private enterprise could operate passenger trains, and the market would sort out the winners and losers.

But that is not possible under current conditions. Private enterprise owns most of the railroad tracks, while the government owns most of the airports and roads. I know you know that, but this means that on infrastructure development, private enterprise is competing against the government. Thus there is no incentive to maintain the infrastructure to passenger service standards, much less accommodate any potential passenger growth, without government involvement.

So if you can find an equitable arrangement, given real world conditions, whereby market forces can be allowed to provide the best possible rail service (without inserting your or my preconceived notions about which types of trains are workable and which are not), I'm willing to listen.

But unilaterally singling out certain trains for elimination just to suit an ideology, without leveling the playing field first, strikes me as simply unfair.

 

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Posted by CG9602 on Saturday, January 5, 2008 6:16 PM
The points Samantha raises are all very good. To them I might include the presence in the transport marketplace of the passenger train. With once per day service in each direction, Amtrak's penetration of a given transport market is going to be small - which is one of the issues that detractors raise when the subject of funding comes up. taxpayer funded highways, which do not serve the market in the same fashion that a train does, are available almost all of the time, with some exceptions. In most places, a passenger train is not an option because there has not been enough funding for it to be an option. As several individuals at the forums here have written, the United States has been having this discussion on and off since 1971, and we still have not yet reached a compromise solution as to the degree with which trains should be funded or offered as a travel option.
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Posted by Anonymous on Saturday, January 5, 2008 5:39 PM

Well, this topic has certainly generated more interest that I could have imagined. 

As is the case with most issues, there are many legitimate views regarding whether the government should be in the railroad business and, if so, to what extent.

In my view government should not be in any commercial enterprise, especially one that is not used by most of the people in the body politic.  Competitive markets are the best place to allocate scarce resources, whether it is tobacco or cars or passengers trains.  Free markets, however, have winners and losers.  Not every activity makes the cut.  But they are the best way to determine what people are willing to pay for in an arms length transaction.

No one knows what the government would have spent the money on if it had opted not to save the intercity passenger train.  All we know at this point is that Amtrak has received substantial taxpayer funds since 1971 and could not have continued without them. 

 

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Posted by oltmannd on Saturday, January 5, 2008 12:48 PM

 motard98 wrote:
If the government is looking to cut out some subsidies why don't they start with the Tabacco farmers and use money on Amtrak?

or cotton or corn for ethanol or lakes for boating or.....

Michael Sol makes a good point.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by motard98 on Saturday, January 5, 2008 11:24 AM
If the government is looking to cut out some subsidies why don't they start with the Tabacco farmers and use money on Amtrak?
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Posted by MichaelSol on Saturday, January 5, 2008 10:39 AM

 Samantha wrote:
And the billions of dollars that the government has spent on Amtrak's intercity passenger trains could have been spent on higher priorities.

And a lot of lower priorities as well. In the broad scheme of government spending, Amtrak makes more sense than a lot of so-called "priorities". It's not like Amtrak's subsidy would be put to anything more useful and available to the general public.

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Posted by CG9602 on Saturday, January 5, 2008 10:12 AM
Samantha, your obvious faculty with numbers is impressive. Regarding some of your points, the "preference" for automobiles was as much a response by the public to the investment and spending choices being made by our elected representatives. You also ignore the several different markets being served as a train makes its way from one end of its run to the other. Seats aboard a train fill up as the train travels along its route, and the level of ridership / occupancy changes as people get on or off along the route. That is different than an aircraft route, where all of the ridership is strictly between two points. Long distance trains serve several different markets (types of riders) with a given set of equipment. Some people would argue that railroads were actually driven out of the passenger business by taxpayer supported spending on airports and highways, and if one was to include different costs as part of car ownership, the numbers might change in the favor of trains.

Other issues to consider are that measuring highways and passenger trains are like comparing apples to oranges.
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Posted by Anonymous on Saturday, January 5, 2008 9:04 AM
 oltmannd wrote:

If the RAILROADS had been allowed to treat passenger trains as a business in the 1960's, I'm not sure there would be any intercity passenger trains left! 

Had Congress not agreed to save intercity passenger trains through the formation of Amtrak, they would have been laid to rest by the early 70s, with the possible exception of the Northeast Corridor trains.  And the billions of dollars that the government has spent on Amtrak's intercity passenger trains could have been spent on higher priorities.

Americans had demonstrated since the 1950s that they preferred airplanes for long distance travel, automobiles for intermediate and short distance intercity travel, as well as for family vacations irrespective of the distance, and commuter rail or buses in major urban areas. 

If the intercity passenger train, especially the long distance train, had been allowed to expire, only a few die hard rail buffs and a tiny percentage of the population that is unable or unwilling to fly, take the bus, or drive would have been inconvenienced.

Subsequently, as we have seen in California, Illinois, and Pennsylvania, as well as my automobile loving Texas, rail was chosen to overcome corridor transport congestion in a few markets.  Amtrak was not required to bring this about.  Other corridors are likely to see rail as a good solution to deal with congestion, although it is not always the best choice.

The passenger train might be able to stand on it's own in high density, relatively short corridors, if governments stopped subsidizing all forms of transport including passenger rail.  A thorough discussion of transport subsidies is beyond the scope of this forum.  However, here is an example of how one element in the mix could level the playing field.   

The tax on gasoline, which is a user fee, does not reflect its true cost, or the cost of the facilities required by motor vehicles, e.g. local and county roadways, traffic enforcement, etc.  If motorists were required to pay these costs at the pump, as opposed to paying them indirectly, the cost of operating a motor vehicle would go up significantly.    

The cost of maintaining a naval presence in the Middle East to keep the oil sea lanes open or the costs associated with the air pollution created by vehicles is not imbedded in the price of gasoline.  Likewise, the cost of building local and county roads, which are paid for with property taxes and bond proceeds, or the cost of traffic law enforcement, is not attached to the price of gasoline.    

If the aforementioned costs were rolled into the pump price of gasoline, it would probably be well north of $5.00 a gallon.  It would cause most Americans to opt for more fuel efficient vehicles and greater use of public transport including short haul trains

Higher fuel costs might create an environment where it would be possible for train operators to recover their costs and earn a return for their shareholders.     

People who drive alone or with a partner might opt for the train over a relatively short distance if the price points were reasonably close and the train offered a better value package.  However, it is doubtful that any operator could haul a family of four as cheaply as putting them in the family buggy. 

Amtrak's mid-week fare from Los Angles to San Diego is $29.  Assuming that a private train operator had a cost structure similar to Amtrak's, it would need to increase the fare by 121 per cent to recover the attributed costs before interest and depreciation.  In addition, it would have to add a component to cover interest and depreciation as well as a return for the shareholders.  Readily available information does not show how much of Amtrak's interest and depreciation is driven by the Surfline. 

Assuming the facilities were owned by the state and the operator is charged a fee for using them, the interest and depreciation pass through would probably be less than Amtrak's system rates, which are weighted toward the capital intensive Northeast Corridor.  So let's add another nine per cent for interest and depreciation for the Surfliner and 7.5 per cent for the return on equity.  This means the operator would have to charge $39.88 for a LAX to San Diego coach ticket. 

The fully allocated cost to drive my 2004 Toyota Corolla, as an example, from LAX to San Diego would be approximately $56.25 if gasoline was $5.00 a gallon.  This assumes that all costs are variable, which they are over the long run.  Given the other elements that make up the value model, comfort, safety, etc., I would probably take the train if catching it was convenient, i.e. access to the station, parking, security, etc.  

The cost for other motorists would vary greatly, depending on the price of their car, whether it was financed, how long the owner keeps it, how fast he or she drives, maintenance costs, insurance costs, etc. 

If the government created a level playing field for all common carriers, as well as private transport, market driven passenger trains might be possible in some areas.  If not they should be junked.    

Unfortunately, a rational national transport policy is not likely to emerge in this country.  It would hit too many emotional hot buttons.  So we will go on subsidizing most forms of transport and continue to have a sub-optimized system of moving people and goods.

                 

 

 

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Posted by Anonymous on Thursday, January 3, 2008 10:09 PM

For the fiscal year ended September 30, 2007, the Sunset Limited was on time at its end points - New Orleans and Los Angles - 13.5 per cent of the time.

I have tracked its on-time performance at El Paso and San Antonio since August 1, 2007.  It has been late, on average, by two hours at El Paso and 110 minutes at San Antonio.  However, it has a long scheduled lay over at San Antonio, so it is usually able to make up some schedule time between San Antonio and New Orleans. 

I would plan on being off the advertised arrival time in New Orleans by 45 to 60 minutes.  

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Posted by SFbrkmn on Thursday, January 3, 2008 4:53 PM
What has been the ontime performance (if any) of #2 into New Orlans of late. End of Feb I'm riding #2 LAX-NWO
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Posted by oltmannd on Thursday, January 3, 2008 1:00 PM

 conrailman wrote:
Amtrak carried 25 Million people in 2007, that aot of people who use amtrak.

25M ain't nothin' to write home about.  Historically, Amtrak ridership hasn't even kept pace with the population growth.

If you took all those passengers, assumed they rode an avg of 24 hrs (which is way high) and concentrated them on one corridor, it wouldn't even amount to the capacity of a single lane highway.

(25,000,000 /365 /24 /2 = 1400 people per hour in each direction.  A highway lane capacity is 1900 vehicles per hour)

...which brings us to....

Moving those 25M people took about $1.3B in total subsidy (a little less than half was direct operating subsidy)  What if it were $2.5B?  Would that be "too much"?  How about $10B to move 25M people?  $50B?  At what point would you say, "That's too much.  Kill it".

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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